Franchise
10. Common Problems
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 27 Jul 2015
- The success of a franchise depends heavily on the franchisee complying with the operational and brand requirements of the franchise agreement. Failing to comply with these parts of franchise business operations can lead to a franchisee being in breach of the franchise agreement.
- Franchisors frequently report that franchisees fail to live up to the expectations of brand compliance particularly where consumers expect consistency between franchise locations.
- Common examples can include:
- a failure to ensure that equipment and facilities are kept clean and sanitary;
- supplying products that are not offered by the franchise company; and
- substituting 'similar' products in place of the brand-identified products to cut costs.
- Such problems can put the franchisee in breach of their contractual agreement. From a franchisors' perspective it can be a risk to the success of their brand which often relies heavily on consistency and uniformity between locations. It can also make franchisors reluctant to renew or extend the franchise agreement.
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